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ITC: lifting restrictions would increase sales to Cuba

U.S. rice producers and merchants could sell more rice to Cuba with little risk of default on payments if the Treasury Department’s Office of Foreign Assets Control lifted the restrictions it imposed on such sales in 2005.

A 180-page report prepared by the U.S. International Trade Commission says all agricultural commodity sectors would likely benefit from ending the OFAC restrictions, which require Cuba to pay for shipments of agricultural commodities before they leave U.S. ports.

“Lifting financing restrictions would have a significant positive effect on U.S. rice exports to Cuba,” according to the report issued July 19. “Eliminating both trade and travel restrictions would likely increase U.S. rice exports by $15 million to $44 million above the 2006 level.”

Sen. Max Baucus of Montana and Sen. Mike Crapo of Idaho have introduced legislation that would bar the Office of Foreign Asset Control from enforcing its trade and travel restrictions to Cuba. Similar legislation is pending in the House.

The Office of Foreign Asset Control restrictions deprive the United States of more than 3,300 jobs and the rice industry of about $150 million in the export value of U.S. rice each year, Bill Reed, vice president for public affairs for Riceland Foods, testified during a May 1 ITC hearing.

“Currently, we are unable to become the primary of supplier of choice for Cuba … given that the U.S. restrictions in place prevent us from being a reliable supplier,” said Reed, who spoke on behalf of the USA Rice Federation.

“Current regulations make trade with Cuba extremely cumbersome and add unnecessary expense for American producers,” according to a Senate Finance Committee news release issued with the ITC report.

“Congress intended to facilitate agriculture trade with Cuba when it passed the 2000 Trade Sanctions Reform and Export Enhancement Act.” The trade restrictions that have resulted from OFAC’s reinterpretation of TSREEA have “impeded trade, causing a 15 percent drop in exports to Cuba,” the release said.

The Baucus-Crapo bill, S-1673, would clarify congressional intent regarding payments for agricultural purchases; streamline bank-to-bank payments between Cuba and the United States; eliminate travel restrictions, facilitating Cuban officials to visit the United States for agricultural purchases; and ease restrictions currently complicating the sale of U.S. medical supplies to Cuba.

“Cuba represents an important opportunity for agricultural exports and fuller U.S. engagement in Cuba is essential to bring positive change to the country,” said Crapo, a Republican.

“The report’s conclusions reflect our discussions with USA Rice members who sell rice to Cuba and with Cuban officials,” said USA Rice President and CEO Betsy Ward. “We fully support the legislation sponsored by Sens. Baucus and Crapo.”

“There is no single commodity that can gain more from free and open trade with Cuba than U.S. rice,” said Marvin Lehrer, the USA Rice senior consultant for Cuba. “Cubans are ready and eager to buy more U.S. rice as they prefer the quality and cooking results. The Cuban government also prefers to buy from the U.S. because of less costly and simpler logistics.”